By Jeff Birren
The Court of Appeal’s (“CoA”) factual summary runs from page two to eleven (Todd McNair v. NCAA, Court of Appeal, Second Appellate District, Case No. B245475, (December 7, 2015). The NCAA consists of 1,200 educational institutions, and the schools, their employees, athletes and alumni are required to comply with NCAA rules. The opinion is silent as to whether NCAA officials must obey NCAA rules, though it appears to be otherwise.
Its Committee on Infractions (“COI”) is comprised of representatives of member institutions that are athletic and economic competitors of the schools they punish. COI received information that a player at USC, Reggie Bush, had received improper benefits from prospective agent “Lloyd Lake, a convicted felon, and his associate, Michael Michaels” (Id. at 3). It issued a notice of allegations and charged McNair with unethical conduct, and that McNair “knew or should have known that Bush, Lake and Michaels were engaged in possible violations” (Id. at 4).
COI’s report stated McNair “had knowledge that [Bush] and [Lake and Michaels] were likely engaged in NCAA violations,” that Lake had a two minute call with McNair wherein he urged McNair to convince Bush to honor his obligations, that McNair provided false and misleading statements during the investigation, that McNair failed to alert USC to the violations and that he falsely attested to knowing of no violations. McNair claimed he did not remember the phone call. COI’s report found Lake was “credible in his report of the call” (Id. at 4-5).
The NCAA, however, “botched” its investigation. When it questioned Lake about the call, he said “that’s when I went to jail, that’s when everything started falling apart, I mean it fell apart,” and there was “no doubt that McNair knew about the benefits merely “[c]ause he was around a lot, and, you know, [its] like he watched me get them guys, his friends, hotel rooms…” (Id. at 6). The second time McNair was interviewed, he was asked about a call in 2006 (Id. at 7). There is no evidence that Bush told McNair about the agency agreement: “Hence, the interviews about the two-minute call appear to be the sole basis for the NCAA’s findings that McNair knew about the NCAA violations” (Id. at 8). It seemingly did not occur to COI that a felon spurned might dissemble.
COI’s report gave three reasons why it did not find McNair to be credible. First, it cites a party in San Diego where McNair allegedly met Lake, yet “COI concludes in its report that the March 2005 party does not support the findings against McNair and notes ‘unresolved discrepancies in what the witnesses reported’ reported about the party” (Id.). Second, McNair and Lake had a mutual friend. Finally, calls to Lake were made from McNair’s phone at a 2006 event where both McNair and Lake were in the same location (Id.).
COI deliberations are open only to COI’s voting members: “The NCAA bylaws require the COI ‘shall excuse all others from the hearing, and the [COI] shall make its determinations of fact and violations in private’” (Id. at 9, emphasis in original). “At the time of the USC investigation, it was against proper procedure and policy, and would be inappropriate, for nonmembers, nonvoting observers, or the Coordinator of Appeals, to participate in, or express and opinion about, deliberations of the voting members of a particular committee” (Id.).
The NCAA violated its own rules. It allowed Roscoe Howard to observe the proceedings and to speak during the deliberations (Id.). He also sent a four and half page email to COI members, stating McNair “should have all inferences negatively inferred against him” and it also referred to “other information from outside the record alluding to criminal events in McNair’s past. The COI allowed Howard to participate in, and express his strong opinions, during deliberations despite policy that prohibited this conduct” (Id. at 9-10).
COI allowed another NCAA operative, Rodney Uphoff, to likewise express his opinions to COI, and he collaborated with COI support staff liaison Cooper. Cooper quoted Howard’s comments to Uphoff. Uphoff also urged Cooper to respond to a request from a COI member (Id. at 10).
The NCAA never informed McNair that it violated its own rules, nor did it give him an opportunity to respond to their improper conduct.
The NCAA agent who had interviewed McNair admitted in his deposition that it needed evidence that USC knew of the violations in order to punish USC (Id.). The best it could do was to assume that the felon was credible based on this felon’s assumptions about McNair. Solely on that basis, the NCAA punished USC, Bush, and McNair, and COI denied McNair’s appeal. COI prohibited McNair from engaging with student athletes, required institutions that hired McNair to report this to COI, to monitor his activities and affirm that he had complied with their punishment. NCAA officials, including President Emmert then made public statements of fact concerning McNair, all based on COI’s assumptions.
McNair sued the NCAA for libel, slander, interference with contract, interference with prospective advantage, breach of the NCAA’s contract with USC as a third-party beneficiary, negligence and for declaratory relief.
The NCAA’s Special Motion To Strike
The NCAA responded by filing a “special motion to strike” the complaint, claiming their activity was “conduct in furtherance of protected activity” and was thus “within the purview of the anti-SLAPP statute (CCP) §425.16” (Id. at 11). McNair had “limited discovery” (Id. at 12). The NCAA sought to seal the record of its own misconduct and rule violations. The CoA denied the motion (McNair v. NCAA, 234 Cal. App. 4th 25 (2015), “The Public Is Invited” SLA Volume 12, Issue 3, 2-20-15).
The motion also claimed McNair could not prevail as the NCAA’s statements were not false, were nonactionable opinion, and were made without malice. By the time of the NCAA’s reply brief, it argued “most of the facts disclosed in the (COI) report are true,” and their report about McNair’s credibility “represented opinion” (Id. at 12). The court denied the motion and the NCAA appealed. It contended McNair “failed to demonstrate a likelihood of prevailing on the merits of his libel cause of action; the trial court erred in failing to address the slander cause of action, and in ruling that the non-defamation causes of action did not arise from protected activity” (Id. at 13).
Libel
To prevail on an anti-SLAPP special motion to strike, the defendant must show that the cause of action arises from an act in furtherance of the defendant’s right of petition or speech. If accomplished, the claim must be stricken unless the plaintiff can establish a probability of prevailing on the claim. The plaintiff “must adduce evidence that would be admissible at trial, and cannot simply rely on his or her pleadings” (Id. at 14). Review is de novo.
Libel requires the existence of a falsehood determined by the totality of the circumstances. The NCAA “focuses on the operative statements in COI’s report that McNair knew about the and improper benefits” (Id. at 15), that he provided false and misleading information to NCAA operatives in claiming he did not know about the agreement, and of a two-minute call that he had with Lake, and by falsely attesting that he knew of no violations. The NCAA claimed COI’s report was true, based on the Lake interview.
The CoA was unconvinced. “Lake appeared to be confused when questioned about his relationship with McNair” (Id. at 17). “Although Lake said in his interview that McNair ‘knew about the money (Bush) took, he knew that (Bush) had an (agency) agreement,’ when pressed by the interviewers, Lake made clear that this was Lake’s own assumption. Nowhere during Lake’s description of the two-minute call did Lake ever say that he informed McNair of, or that McNair claimed knowledge about, the agency agreement and improper benefits. Instead, Lake speculated that Bush told McNair, or that McNair knew from osmosis because ‘he was around a lot’ and ‘watched,’” (Id., emphasis in original).
The NCAA next argued that even if their statements are false, it could not be defamatory because it did not expose McNair to hatred, ridicule or injure him in his profession. The CoA disagreed: “To the contrary, the operative statement served as the support for the COI finding that McNair knew about the rule violations and hence engaged in dishonest and unethical conduct in his occupation” (Id. at 18, emphasis in the original).
The NCAA insisted it believed Lake over McNair thus its “findings are merely its own opinions” (Id.). This, too, failed. The claim was based on the assertion “that McNair knew about the NCAA rules violations and lied about that knowledge…Furthermore, the operative statement was the justification for the serious sanctions against McNair, and common sense tells us that a sanction is more than a simple opinion. In sum, a reasonable factfinder could conclude that the published statement declares a provably false assertion of fact and not opinion with the result that McNair has established a probability of prevailing on the merits of his libel cause of action,” (Id. at 19).
Slander
The NCAA did no better with the slander claim. The claim was based on five oral statements made by NCAA agents to the news media, including one by Emmert. The CoA noted there was no dispute that the statements arose from protected activity. NCAA agent Dee stated to the media that there was “knowledge of possibly rule violations by a member of the coaching staff which apparently was not reported,” that “’[t]he assistant football coach failed to report information to the compliance staff regarding potential NCAA violations related to the activities of [Lake and Michaels]. He also attested falsely he had no knowledge of NCAA violations. His conduct impeded the institution from fulfilling its…obligation under the NCAA bylaws. His conduct also resulted in findings that he violated NCAA unethical conduct legislation by providing these statements’ (Id. at 20). In making these oral statements, Dee republished to a new audience statements from the COI report, which statements we have concluded could be understood by a reasonable factfinder to assert provably false statement of fact, (citation omitted). Accordingly, McNair showed a probability of prevailing on the merits of his slander cause of action” (Id.).
The NCAA claimed that McNair was a limited public figure, and the trial court agreed. Therefore, McNair would have to prove actual malice to prevail. In their opening appellate brief it contended he was a public figure. By its reply brief he was once again a limited public figure (Id. 21, fn. 5). The CoA held: “McNair was a limited purpose public figure” (Id. at 22).
McNair thus had present evidence “to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication” (Id.). “The standard of proof for malice “is clear and convincing evidence” (Id.). The factors include a “failure to investigate, anger, and hostility toward the plaintiff and reliance on sources known to be unreliable or biased, ‘may, in an appropriate case, indicate that the publisher himself had serious doubts regarding the truth of his publication’” (Id. at 22-23). Although “a failure to investigate alone will not support a finding of actual malice,” a “failure to investigate which ‘was a product of deliberate decision not to acquire knowledge of facts that might confirm the probable falsity of [the] subject charges’ will support a finding of actual malice”(Id. at 23).
“[W]e conclude that McNair carried his burden. First, McNair produced deposition testimony, interview transcripts, and emails showing that the COI had difficulty in at arriving at a consensus about the allegations against McNair. The enforcement staff’s interview of McNair was ‘botched.’ One COI member was concerned that it was McNair’s word against Lake’s but that Lake’s transcript was ‘choppy’ about his relationship with McNair. Even Howard, a nonvoting member, acknowledged that the investigation ‘fell short.’ Notwithstanding McNair’s appeal to the Appeals Committee alerting the NCAA to each of the purportedly false statements in the COI report, the report went unchanged. This showing gives rise to a convincing inference that the COI had serious doubts about McNair’s knowledge of asserted NCAA violations ad nonetheless published the COI report” (Id. at 23-24).
The CoA noted the “paucity of evidence that McNair knew about the improper benefits and agency agreement; and the knowledge that (one of their own staff members) ‘misspoke on the date’ of the two-minute call when questioning McNair, the NCAA made the deliberate decision not to re-interview McNair to clarify the date of the two-minute call and to obtain his response. McNair made a sufficiently convincing showing that the NCAA recklessly disregarded the truth when the COI deliberately decided not to correct the investigation’s errors or to acquire more information about what McNair knew concerning the rules violations, even after McNair notified the Appeals Committee of the errors” (Id. at 24).
An NCAA official acknowledged that without a finding against McNair, there could be no penalty against USC. McNair produced evidence that the NCAA “violated its own procedures by considering facts outside the record without affording McNair an opportunity to explain, and by allowing nonvoting members to influence the deliberations. Howard shared with the COI his seriously hostile feelings about McNair in an email at cited facts outside the record. He also expressed his opinions during the deliberations” (Id.). “This evidence clearly indicates that the ensuing COI report was worded in a disregard of the truth to enable to arrive at a predetermined conclusion that USC employee McNair was aware of the NCAA violations” (Id. at 24-25).
The CoA noted: “the NCAA did not otherwise cite us to any statements from Bush that he told McNair” (Id. at 25). “The issue is not whether McNair lied about ever speaking to Lake. Such conduct would not justify the extreme sanctions against McNair and USC. The defamatory statement is that McNair knew about the improper benefits and the agency agreements as asserted in the COI report and lied about that knowledge. As one COI member observed in an email, McNair ‘may have not told the truth about knowing Lake, but the real question would seem whether he knew of Lake’s plans to have the agency and that he was giving benefits to [Bush]’” (Id. at 25, emphasis in the opinion).
The Five Non-defamation Causes of Action
The NCAA unsuccessfully asserted to the trial court that remaining causes of action arose from protected activity and were thus subject to the anti-SLAPP special motion to strike.
McNair alleged the NCAA interfered with his USC contract by “inappropriately labeling [him] as unethical” (Id. at 26). However, a plaintiff must prove the existence of a valid contract. McNair’s USC contract USC had expired. That claim had to fail. The CoA reversed and struck it.
McNair alleged that the NCAA interfered with his prospective economic advantage. This tort requires an economic relationship between plaintiff and a third party, a probability of plaintiff’s future economic benefit, the defendant’s knowledge of that relationship, the defendant’s intentional, wrongful act designed to disrupt that relationship, and proximately caused harm. The CoA determined McNair “failed to demonstrate that it was ‘reasonably certain’ that USC would have renewed [his] contract but for the NCAA’s unethical conduct finding” (Id. at 27).
McNair declared the new football coach, one Kiffin, told him he intended to hire him but Kiffin and a school vice president subsequently said they could not because of COI’s report. Those statements, offered for the truth, were hearsay. McNair failed to present evidence that the NCA knew of his job prospects and interfered with them, or that the prospective jobs were more than “speculative expectations” (Id. at 28). The CoA reversed and struck the claim.
McNair brought a claim for breach of the covenant of good faith and fair dealing in the NCAA’s USC agreement by arbitrarily enforcing its rules, by denying McNair the opportunity to fully participate in its process, barring him from questioning witnesses and for failing to provide him with a fair appellate process. The NCAA argued this cause action of action arose from protected activity and was thus subject to its motion to strike.
The trial court thought otherwise: the CoA agreed. The claim “alleges only a garden variety breach of contract concerning the process” (Id. at 28).
McNair claimed the defendants were negligent as they “had a duty to use reasonable care in the manner in which they conducted themselves towards Plaintiff” and the “foreseeable consequence of the manner in which Defendants conducted their investigation” was that McNair suffered harm in his career as a football coach,” (Id.). The cause of action was not based on public comments, but rather “was based on the NCAA’s investigatory process with the result that the negligence cause of action does not arise from the protected activity” (Id. at 28-29), and was not subject to the motion to strike.
McNair sought a declaration that the NCAA’s rules and regulations as applied to him “be stricken as arbitrary, capricious, and a violation of all notions of fairness and good faith. This cause of action does not arise from protected activity is hence is not subject to the special motion to strike” (Id. at 29). Costs on appeal were awarded to McNair.
McNair’s lawsuit has revealed a sordid tale of machinations and rule violations by NCAA operatives. President Emmert surely has imposed the same draconian sanctions on them that they imposed on McNair. If not, the alternative is too awful to contemplate.
Birren is a frequent contributor to Sports Litigation Alert
